A woman wearing a surgical mask walks past the Royal Exchange in the capital’s financial district, in London, England on March 11, 2020.
Richard Baker | In images via Getty Images
The UK economy grew 6.6% in July on a monthly basis, according to first estimates released on Friday, as the economy tries to recover from the sharp downturn caused by the coronavirus-induced lockdown measures.
Estimated July GDP (gross domestic product) growth was broadly in line with expectations, with economists interviewed by Reuters expecting a monthly expansion of 6.7% and following growth of 8.7% at June and 2.4% in May, after a record drop of 20% in April.
“Even though it has continued steadily on its path to recovery, the UK economy has yet to recover nearly half of the GDP lost since the start of the pandemic,” Darren Morgan, ONS Director of Economic Statistics, said in a statement Friday.
UK GDP in July was 18.6% above the low of April 2020, but remained 11.7% below the pre-pandemic levels seen in February.
Thomas Pugh, a UK economist at Capital Economics, said that although July growth slowed slightly from the previous month, he still indicated that record negative GDP growth rate in the second quarter will be followed by record positive growth rate in the third. UK GDP contracted by 20.4% in the second quarter of 2020.
“However, July was likely the last of the major increases in activity and a full recovery will likely not be achieved until early 2022, which is why we believe the Bank of England will further expand QE (quantitative easing) by an additional £ 250 billion in total, “Pugh predicted.
The country’s emergence from lockdown measures and the reopening of pubs and restaurants in recent months has meant that activity in the accommodation and food service sector increased 140.8% month-over-month in July, helping total production of services at an expansion of 6.1%.